Archive for February, 2012

Pubcos are threatening the existence of traditional boozers. We’re looking for stories about local pubs facing the squeeze

For its next instalment, Anywhere but Westminster is going down the pub. To be more specific, we’re aiming to look closely at the decline of British boozers, their place in millions of lives, and an overlooked aspect of what some people call irresponsible capitalism.

The idea was sparked by a pre-Christmas read of Paul Moody and Robin Turner’s great book Looking for the Moon Under Water: The Search for the Perfect Pub (extracted here, with a G2 spinoff here). Around 20 British pubs close every week, and a few factors are blamed – among them, the smoking ban and the rock-bottom price of alcohol in supermarkets. But there is another story: the imbalanced relationship between big pub companies (or pubcos) and their tenants, and the government’s failure to do much about it.

The issue seems simple enough: as countless publicans see it, these firms charge tenants above-market prices for drinks and repeatedly squeeze them even further by upping rents. To make things worse, the government is clinging to that tired and useless notion known as self-regulation, having so far only agreed to set up an independent panel to review how it works, rather than doing what a lot of people want and coming down on the pubcos much harder. MPs’ postbags and inboxes are full of correspondence about all this, and it was the subject of a Commons debate back in January.

“The business model of the pubcos has been akin to the banks. They overvalued their estates, borrowed vast amounts of money against that and when the property market collapsed, they found their ludicrous valuations were wrong and they suddenly found themselves billions of pounds in debt. They are trying to service those debts – mainly with foreign creditors – by taking more and more from the turnover of each pub.”

So, do you know of a pub being squeezed, or even threatened with closure? If it wasn’t there, what would be missing from your town, and your life? How can the pubcos be resisted? And what can be done to save this blessed institution?

Flamboyant opulence and welfare-to-work are not the easiest of fits, and the tension between public services and profit is building

When piecing through the story of Emma Harrison’s high-velocity fall, bear one thing in mind. Yes, she stepped down from two high-profile roles in as many days: first, her somewhat vague gig as David Cameron’s “families tsar”, and then her chairmanship of A4e. But she is not facing any reduction in her income and wealth, nor a curtain falling on her influence over the company she founded 21 years ago. She retains the 87% shareholding in A4e that recently led to a dividend of £8.6m, and the portfolio of work pushed the company’s way by the government is set to expand. Everything, of course, depends on the outcome of ongoing fraud investigations and whether there are more allegations of malpractice, but from where I’m sitting, Harrison may well be in line for a rather nice future: less heat and less work, but potentially even greater takings.

Still, even if her resignations have threatened to distract attention from the meat of the A4e story via symbolic manoeuvring, one question is still worth asking: in terms of the events of the last week, what was her big mistake?

Though A4e stands out in that it derives the entirety of its income from public contracts and is under investigation for fraud, it is just one of scores of companies who feed off the public purse and pay their high-ups amazing sums of money. Usually, however, these organisations are so faceless as to be all but invisible. Under Harrison’s reign, by contrast, A4e was different – and via TV shows, YouTube videos, an account with Max Clifford (who lists her as a past client) and PR pushes aimed at increasing her profile, she not only became too visible, but told us things about herself that fatally damaged her reputation. In the end, the Derbyshire mansion and claims of living in “utter luxury” were too easy to use as signifiers for the difficulties being experienced by her firm, and the dangers of government outsourcing – not to mention the contrast between her apparently endless good fortune and the lives of the people she claims to want to help. Flamboyant opulence and welfare-to-work, it’s fair to say, are not the easiest of fits.

As a contrasting example, consider Chris Hyman, a 49-year-old father of two with a passionate interest in motor racing. You may not have heard of him, but he’s the CEO of Serco, the ever-expanding outsourcing giant who see to – among other things – the Yarl’s Wood detention centre, electronic tagging schemes, four British prisons, the operation and maintenance of several RAF bases, “facilities management” at NHS hospitals, schools inspection in the Midlands, and more. A few people consider Serco notorious, but to most, the company remains anonymous. Everything about it, in fact, is a study in the art of keeping your head down.

But the money involved screams for attention. Sixty per cent of Serco’s business is rooted in the UK, and in March last year they announced profits of £214m. For 2010-11, Hyman’s pay package was put by the company at £1.86m, a figure that excluded “pensions and long-term incentives”, and £1.6m in share options exercised during the previous 12 months. In 2010, he captured his firm’s pitch to the cash-strapped state thus: “Many of our government and commercial customers are seeking to reduce costs, [and] we have the necessary skills to help them.” Though Serco claims to be an expert squeezer of public spending, between 2010 and 2011, Hyman’s package went up by 18%. Clever, that.

Such examples extend into the distance: thanks to an excellent report in Sunday’s Observer by Daniel Boffey, you can read about more of them here. We will see what happens in the coming months (watch the House Of Commons public accounts committee closely), but as happened with Harrison and A4e, more of these firms may yet fall victim to an aspect of austerity that, only a week ago, was still much overlooked: the fact that unease about high pay can easily turn into unbelieving outrage when people are making a good deal of their fortunes on the back of the state. The big question is simple enough: if we now demand belt-tightening from just about everyone in the public sector, hadn’t the same considerations better apply to the firms and individuals who wouldn’t be in business if it wasn’t for public contracts?

If that’s the case, two particular political factions probably ought to watch their backs. For decades now, the introduction of the profit motive into public services has been held to be synonymous with dynamism, innovation and increased responsiveness to the “customer”. There is, of course, plenty of evidence to the contrary, but the more zealous minds one associates with the rule of New Labour still believe it, and most Conservatives hold it as an article of faith.

Much of the latter’s focus is currently targeted on education – and in rightwing circles, corks were recently popped over a contract for the management of Breckland Free School in Suffolk being awarded to a Swedish profit-making firm called International English School. Its turnover in 2009-10 was put at around £60m, with profits estimated at £5m; its sole shareholder is Barbara Bergstrom. I spent a fruitless couple of hours trying to find details of her dividend payments, to no avail: for all I know, she may live in a wooden shed, and hand back any personal takings to be spent on books, sports equipment and teacher training. But you can see the problem here: even if some “providers” turn out to be saintly, others will use the profit motive as nature intended, and get as rich as the rules will allow.

In other words, once any residual queasiness within government about profit-making schools has been banished, we could soon be faced with educational Emma Harrisons. Certainly, if Andrew Lansley gets his way, the same could easily apply to the NHS. If you want a flavour of where the credo of choice and competition could take things, consider the example of Circle Healthcare: recently given a £1bn contract to run a hospital in Cambridgeshire, reportedly aiming at acquiring three more, backed by hedge funds, and commanded by an ex-Goldman Sachs banker called Ali Parsa (”Mr Parsa’s mission is to provide clinical services to the NHS – while turning a profit,” says the Economist). While we’re here, it’s also worth mentioning the recent £200m deal struck between the Lincolnshire Policy Authority and the multinational firm G4S to open Britain’s first outsourced police station. As ever, it’s presented as a matter of saving money, but if the idea spreads as cuts in police numbers kick in and G4S’s CEO takes home the obligatory millions (£1.42m last year), will anyone be convinced?

Do not rely on senior figures in the Labour party to make the running on this issue: after all, it built a huge share of the shadow state in which these people make their money. There again, if the progress of the Emma Harrison story – as with the recent controversy about workfare – is anything to go by, these things no longer need the involvement of front-rank politicians to build unstoppable momentum. One thing is certain: though long buried, the tension between public services and profit is back – and this story is only just starting.

Flamboyant opulence and welfare-to-work are not the easiest of fits, and the tension between public services and profit is building

When piecing through the story of Emma Harrison’s high-velocity fall, bear one thing in mind. Yes, she stepped down from two high-profile roles in as many days: first, her somewhat vague gig as David Cameron’s “families tsar”, and then her chairmanship of A4e. But she is not facing any reduction in her income and wealth, nor a curtain falling on her influence over the company she founded 21 years ago. She retains the 87% shareholding in A4e that recently led to a dividend of £8.6m, and the portfolio of work pushed the company’s way by the government is set to expand. Everything, of course, depends on the outcome of ongoing fraud investigations and whether there are more allegations of malpractice, but from where I’m sitting, Harrison may well be in line for a rather nice future: less heat and less work, but potentially even greater takings.

Still, even if her resignations have threatened to distract attention from the meat of the A4e story via symbolic manoeuvring, one question is still worth asking: in terms of the events of the last week, what was her big mistake?

Though A4e stands out in that it derives the entirety of its income from public contracts and is under investigation for fraud, it is just one of scores of companies who feed off the public purse and pay their high-ups amazing sums of money. Usually, however, these organisations are so faceless as to be all but invisible. Under Harrison’s reign, by contrast, A4e was different – and via TV shows, YouTube videos, an account with Max Clifford (who lists her as a past client) and PR pushes aimed at increasing her profile, she not only became too visible, but told us things about herself that fatally damaged her reputation. In the end, the Derbyshire mansion and claims of living in “utter luxury” were too easy to use as signifiers for the difficulties being experienced by her firm, and the dangers of government outsourcing – not to mention the contrast between her apparently endless good fortune and the lives of the people she claims to want to help. Flamboyant opulence and welfare-to-work, it’s fair to say, are not the easiest of fits.

As a contrasting example, consider Chris Hyman, a 49-year-old father of two with a passionate interest in motor racing. You may not have heard of him, but he’s the CEO of Serco, the ever-expanding outsourcing giant who see to – among other things – the Yarl’s Wood detention centre, electronic tagging schemes, four British prisons, the operation and maintenance of several RAF bases, “facilities management” at NHS hospitals, schools inspection in the Midlands, and more. A few people consider Serco notorious, but to most, the company remains anonymous. Everything about it, in fact, is a study in the art of keeping your head down.

But the money involved screams for attention. Sixty per cent of Serco’s business is rooted in the UK, and in March last year they announced profits of £214m. For 2010-11, Hyman’s pay package was put by the company at £1.86m, a figure that excluded “pensions and long-term incentives”, and £1.6m in share options exercised during the previous 12 months. In 2010, he captured his firm’s pitch to the cash-strapped state thus: “Many of our government and commercial customers are seeking to reduce costs, [and] we have the necessary skills to help them.” Though Serco claims to be an expert squeezer of public spending, between 2010 and 2011, Hyman’s package went up by 18%. Clever, that.

Such examples extend into the distance: thanks to an excellent report in Sunday’s Observer by Daniel Boffey, you can read about more of them here. We will see what happens in the coming months (watch the House Of Commons public accounts committee closely), but as happened with Harrison and A4e, more of these firms may yet fall victim to an aspect of austerity that, only a week ago, was still much overlooked: the fact that unease about high pay can easily turn into unbelieving outrage when people are making a good deal of their fortunes on the back of the state. The big question is simple enough: if we now demand belt-tightening from just about everyone in the public sector, hadn’t the same considerations better apply to the firms and individuals who wouldn’t be in business if it wasn’t for public contracts?

If that’s the case, two particular political factions probably ought to watch their backs. For decades now, the introduction of the profit motive into public services has been held to be synonymous with dynamism, innovation and increased responsiveness to the “customer”. There is, of course, plenty of evidence to the contrary, but the more zealous minds one associates with the rule of New Labour still believe it, and most Conservatives hold it as an article of faith.

Much of the latter’s focus is currently targeted on education – and in rightwing circles, corks were recently popped over a contract for the management of Breckland Free School in Suffolk being awarded to a Swedish profit-making firm called International English School. Its turnover in 2009-10 was put at around £60m, with profits estimated at £5m; its sole shareholder is Barbara Bergstrom. I spent a fruitless couple of hours trying to find details of her dividend payments, to no avail: for all I know, she may live in a wooden shed, and hand back any personal takings to be spent on books, sports equipment and teacher training. But you can see the problem here: even if some “providers” turn out to be saintly, others will use the profit motive as nature intended, and get as rich as the rules will allow.

In other words, once any residual queasiness within government about profit-making schools has been banished, we could soon be faced with educational Emma Harrisons. Certainly, if Andrew Lansley gets his way, the same could easily apply to the NHS. If you want a flavour of where the credo of choice and competition could take things, consider the example of Circle Healthcare: recently given a £1bn contract to run a hospital in Cambridgeshire, reportedly aiming at acquiring three more, backed by hedge funds, and commanded by an ex-Goldman Sachs banker called Ali Parsa (”Mr Parsa’s mission is to provide clinical services to the NHS – while turning a profit,” says the Economist). While we’re here, it’s also worth mentioning the recent £200m deal struck between the Lincolnshire Policy Authority and the multinational firm G4S to open Britain’s first outsourced police station. As ever, it’s presented as a matter of saving money, but if the idea spreads as cuts in police numbers kick in and G4S’s CEO takes home the obligatory millions (£1.42m last year), will anyone be convinced?

Do not rely on senior figures in the Labour party to make the running on this issue: after all, it built a huge share of the shadow state in which these people make their money. There again, if the progress of the Emma Harrison story – as with the recent controversy about workfare – is anything to go by, these things no longer need the involvement of front-rank politicians to build unstoppable momentum. One thing is certain: though long buried, the tension between public services and profit is back – and this story is only just starting.

A4e boss Emma Harrison paid herself £8.6m last year. Nothing unusual for a top banker perhaps. But her company is funded by the government to find jobs for unemployed people. And it’s being investigated for fraud

Emma Harrison is not quite a household name, but plenty of people will recognise her face. You may have seen her on a handful of TV shows: Channel 4’s Make Me A Million, Benefit Busters and The Secret Millionaire, or BBC1’s Famous, Rich And Jobless. There is a fair chance you will have read about the government appointing her as their “families champion”, charged with the task of changing the lives of the 120,000 households deemed to lie at the heart of the Britain’s supposedly broken society.

Just lately, you may have seen some of the slightly more negative coverage of Harrison and the company she founded in Sheffield, 21 years ago: A4e (it means “Action For Employment”), who were decisively glued into the heart of the welfare state by New Labour, and have seen their importance increase thanks to the coalition. They specialise in that very modern practice known as “welfare to work”, and their only income in the UK comes from public contracts. The company’s promotional blurb characterises what it does as the simple business of “improving people’s lives”.

Including, it seems, Harrison’s own. Earlier this month, hearings by the House of Commons’ public accounts committee revealed that last year, Harrison – who is 48, and was given a CBE in 2010 – paid herself a dividend of £8.6m. The company says that, “as with other shareholders”, the money “reflects the risk” she and they have taken during the 20-year lifespan of A4e. Coverage of the story was accompanied by descriptions of her luxurious home in rural Derbyshire: Thornbridge Hall, a grade II-listed mansion that includes a bar, nightclub, pool and 100 acres of land. She, her husband and their four offspring share it with 11 of their friends and six of their children: Harrison describes it as a “posh commune”. The property is also available for hire as an events venue: in 2011, Harrison received £462,000 from her own company for the use of her home for meetings.

If that suggests that all in Harrison’s world is luxury and success, at least some voices have lately been questioning the high-achieving image that she projects. The chair of the public accounts committee, the former Labour minister Margaret Hodge, says aspects of A4e’s past record on welfare-to-work are “abysmal”; one of her Tory colleagues has used the word “dreadful”. Moreover, during her committee’s proceedings two weeks ago, Hodge loudly called into question the amount of money A4e takes from the government, and how much goes into the pockets of its senior figures.

This week, there came even more bad news. Last Friday, it transpired, officers from Thames Valley police raided A4e’s offices in Slough as part of a fraud inquiry: the Daily Mail reported allegations that the staff concerned had managed to place people in jobs that lasted only 24 hours, but still take payment-by-results money from the Department of Work and Pensions. It is not the first time accusations of fraud have been made against A4e staff: in 2009, the Department for Work and Pensions (DWP) discovered that, at A4e’s office in Hull, forms meant for employers agreeing to take on workers had been falsely filled in and signatures forged. A4e dismissed an employee and paid £15,000 back to the DWP. In response to the latest allegations, A4e issued a statement saying that all four of the staff concerned had now left the business, that the company had discovered the “situation” itself through “internal systems”, and that it has “zero tolerance towards fraud”. Meanwhile, those MPs who have set themselves against A4e insisted that its contracts be suspended while the police did their work.

Yesterday, the plot thickened. The MP for Slough, Labour’s Fiona Mactaggart, announced that she has put together a dossier of malpractice at A4e, including its clients being forced to sign blank timesheets, and people being placed on mandatory back-to-work courses during which they were “shunted in and out of rooms, staring at walls, long silences with none of the staff telling the group what was happening”. The company countered that such concerns had been resolved, and repeated the “zero tolerance” line; Mactaggart told me that although the allegations are “not particularly recent”, they “go straight to the integrity of the company”. She said they made A4e “not fit to receive a government contract”.

In the stories that reported all this, there were the inevitable résumés of Harrison’s career, and portraits, complete with her trademark tumbledown fringe, red lipstick and ever-present smile – along with such quotes as this: “I’ve taken the best of my home, the friends, the parties, the laughter, the creativity, and brought it all to Thornbridge. Now we live in utter luxury.”

All told, Harrison is the sort of person whom newspaper profiles routinely term “colourful”, though one of her clients once put it rather more bluntly. “She seeks publicity,” he said, “like a burning plane seeks the ground.”

A4e was founded in 1991, and first specialised in assisting long-term unemployed people in Sheffield – a matter, as Harrison once put it, of “helping my steelworker mates get back to work”. Six years later, it got its first big public contract thanks to the freshly elected Labour government. By 2001, it had opened 35 new welfare-to-work centres across Britain and, as welfare reform began to kick in circa 2009, it became the single biggest supplier of Labour’s Flexible New Deal. As well as the UK, A4e also operates in Australia, France, Germany, India and Poland. Among their paid advisers is the former Labour Work & Pensions secretary David Blunkett, who helps them with “global public service reform”; their director of policy and strategy is Jonty Oliff Cooper, a one-time Tory insider and ex-aide to David Cameron’s strategy director Steve Hilton.

A change of government has only boosted its influence. A4e is now in charge of Iain Duncan Smith’s Work Programme in five regions of the UK, where, in keeping with the idea of the “big society”, it is supposed to work with a tangle of subcontractors: private firms, charities and social enterprises. Some of these organisations complain that A4e has hardly given them any work to do at all; other voices claim that the company takes a big cut of their funds, and does precious little in return.

In another five areas of the country – and if this seems complicated, that is down to the Work Programme’s labyrinthine structure – A4e works as a Work Programme subcontractor itself. In both cases, its essential task is to help long-term unemployed people (those out of work for a year or more – or, in the case of the under-25s, nine months) get back to work. The global downturn may not be quite the barrier it seems: last year, Harrison was caught talking about there being “hidden jobs everywhere”, and she evidently believes in a kind of positive thinking that her detractors claim is somewhat delusional. That said, A4e’s claims of success are superficially impressive: though there is no way of verifying such numbers, its corporate fact sheets claim that “every three minutes of every working day, someone on benefits goes back to work through A4e’s support”, and that between 2010 and 2011, the company helped more than 43,000 people into what they call “meaningful work”.

If it is working directly with unemployed people, each time a jobseeker is referred to it, A4e receives an ”attachment fee” of £400. If that person finds a job and manages to work, either continuously or in short-term chunks, for a total of 26 weeks, the company gets a ”job outcome fee” of £1,200. From then on, if things go according to plan, A4e gets a monthly “sustainment fee”, which can account for the bulk of the money it receives: the most A4e can expect to get for a successful case is around £13,000. The payments vary according to criteria that seem to have been drawn up without much thought about our current economic predicament: despite record-breaking youth unemployment, for example, the lowest fees come from finding work for 18- to 24-year-olds.

In last week’s flurry of outrage over jobless people being compelled to work for their benefit in such retail chains as Tesco, TK Maxx and Argos, A4e was an implied presence. The decision to cut people’s benefit if they either fail to take “placements” or leave them is down to jobcentre staff rather than the firms that see to the Work Programme, but like all welfare-to-work specialists, A4e is a believer in the wonders of unpaid “work experience”.

The rise of A4e also highlights a very modern fact of public life: handing over large swaths of what the state used to do to the private sector has become so mundane as to barely attract comment, and some people have been doing very well out of it indeed. The management consultancy McKinsey is tightly bound into Andrew Lansley’s health reforms; such firms as Serco and Capita provide everything from call centres, through supply teachers, to private prisons. The cutting edge of all this can be mind-boggling: as well as being an unlikely Work Programme provider, for example, the security firm G4S is about to sign a contract to run a privatised police station in Lincolnshire. There is, in short, a growing shadow state, which manages to pay its shareholders handsome dividends despite the climate of chilly austerity. Certainly, in the UK, A4e seems to be something close to an arm of government: it depends on the state for all its takings, and hold contracts worth up to £180m a year.

In terms of the face they present to the world, Harrison and her company have two distinct sides. One is bound up with that strangulated officialspeak that took root in the New Labour period, as proven by the company’s promotional blurb: “Through quality assurance, contract management, performance management, data management; evaluation; capacity building; and market making we help governments deliver more for less.”

This air of slightly laboured sweetness extends to Harrison herself, as demonstrated by the YouTube film made to announce her work with the government as “families tsar”. All is good cheer, innocence, and slight oddness. “It’s everything I wanted to: it’s absolutely wonderful,” she says. “I’ve been asked by No 10 – you know, David Cameron and the gang – to see what I can do to help the families who’ve never worked.”

When the public accounts committee held its recent session about A4e, Margaret Hodge – the MP for Barking, a former work and pensions minister and now the committee’s chair – was on feisty form. “You are one of the first examples we have had of a company which is entirely dependent on public contracts for your existence,” she told A4e’s chief executive, Andrew Dutton. “The profits you make come from the taxes that ordinary, hard-working people pay.” She went on to question not just the company’s track record, but the cut it takes from the charities and social enterprises with which it works: “sheer profit”, she claimed.

When I speak to her, Hodge does not exactly hold back. She says she first came across A4e in her east London constituency, where it is sub-contracting Work Programme activity to a charity. “It seems like a scam,” she says. “They win the contract, and all they do is sub-contract – to a perfectly adequate organisation in my borough called LifeLine, which has developed out of a church. A4e slice off 12.5%. When I met A4E in Barking, I kept asking: ‘What do you do for that money?’ They said: ‘Well, we put people in touch with national employers.’ But this outfit know Asda and Tesco. They’ve been placing people there forever anyway. A4e has no risk, its contribution is minimal, and it still slices off that money. To you and me, that will feel like a scam.”

A4e claims the fees it charges are “amongst the lowest in the industry”, though that will hardly dampen Hodge’s ire. When I mention Harrison’s dividend payment, she is every bit as blunt. “It’s a rip-off. Emma Harrison lives entirely on public contracts. She’s got a load of contracts with the DWP; I believe she’s aiming at getting contracts with the Ministry of Justice, for probation work. It’s all public money. That’s what gets my goat.”

There is perhaps one weakness in Hodge’s position: it was Labour that decisively brought A4e into welfare-to-work in the first place, and commenced the whole outsourcing feast to which she now objects.

“You’ve got to learn from your own mistakes,” she says. “I’ve been completely upfront about that. We got it wrong. Private providers often don’t provide well, and you’ve got to have a tougher hold on them.”

“There are so many areas where there are question marks over A4e’s performance,” she says. “And if there’s a fraud investigation, it’s just common sense to suspend the contracts until the police have completed their investigation. There’s a real lesson here about the ideology of privatisation and how it can lead to waste. There is an assumption that the private sector will always be more efficient than the public sector. But the excess profits in the private sector from providing public services is horribly wasteful of taxpayers’ money. The next thing you’ll be writing about will be free schools and academies, and then it’ll be private providers in the NHS. This is all about some people in the private sector exploiting public spending for private gain.”

One of the most illuminating conversations I have is with an insider at a charity that is one of A4e’s sub-contractors on the Work Programme. Harrison’s image might be that of a workaholic go-getter, but this source tells me that A4e has handed them hardly any work at all: they have been working with A4e since the start of the Work Programme in June last year, and have had “less than 10″ people referred to them. They suspect that they were mere “bid candy”, inserted into A4e’s pitch to the government so as tick the right big society boxes, but now all but marginalised. This suggestion blurs into another allegation made about A4e’s relationship with its Work Programme partners: that it has a habit of creaming off easy cases and handing people with ingrained problems – drugs and alcohol issues, usually – to charities and social enterprises. The company “completely refutes” the second claim, stating “it’s simply not in our interest to do this”. It deems the first allegation “hugely disappointing” and says it has had no formal complaints on the subject. But it acknowledges that “referrals have not come though to some partners as expected”.

But there is a bigger issue: whether, particularly in times like these, the government should be allowing people such as Harrison to take so much money from the public purse, particularly when the results seem so uncertain and the payback seems to include all that negative publicity.

“The charge is that the government is throwing cash at the private sector, into this big money-making machine,” one Work Programme insider tells me. “And at some point, they’ll have to be seen to act. A4e might be an obvious target: being on the front page of the Daily Mail all the time isn’t great, and neither is being accused of fraud.”

They let out a quiet smirk. “It’s just unfortunate that the person at the top is the prime minister’s families champion.”

I’m all for ‘real jobs that worthwhile people do’, be they in a supermarket or anywhere else. So let’s see those jobs

The last five days have been very interesting indeed. Last week, an amazing outburst of anger followed a Tesco advert for nightshift workers who would be paid only their jobseeker’s allowance plus expenses – and as the issue was frantically discussed just about everywhere, a steady stream of employers announced that they had pulled out of the government’s latest “work experience scheme”.

Sainsbury’s and Waterstones had already exited; they were followed by such charities as Marie Curie Cancer Care, Shelter and Scope, as well as the electronics retailer Maplin, and Matalan, who suspended their participation and put it under “review”. Tesco seemed to hold its nerve – but today, it announced that such placements will now be “paid” (though how much is unclear), and come with a guarantee of a full-time job “if the trial goes well”.

Such is the result of a very quick campaign conducted through social media, the outpouring of public opposition via endless radio phone-ins, and the threat of a national day of action tomorrow. But while everything shifts around the government, the Department of Work and Pensions isn’t budging – and with that slightly unhinged air he occasionally affects, Iain Duncan Smith has been given space in the Daily Mail to malign those of us who are opposed to supplying free labour to huge multinationals as “job snobs”. You can read his full piece here: my bullet-point responses to his main points run as follows:

1. “… armed with an unjustified sense of superiority and sporting an intellectual sneer, we find a commentating elite which seems determined to belittle and downgrade any opportunity for young people that doesn’t fit their pre-conceived notion of a ‘worthwhile job’.”

Wrong. Not “any” opportunity, but the kind of faux-opportunity that involves a large element of compulsion (remember, though you can turn down the offer of “work experience” and leave during week one; thereafter you have stay, or your jobseeker’s allowance can be withdrawn), and an overwhelming likelihood of no job at the end. My pre-conceived notion of a worthwhile job, particularly for vast retail chain, is simple enough: it ought to have prospects of some kind, and pay the minimum wage. Incidentally, for 18 to 20-year-olds that’s £4.98 an hour, and for 16 to 17-year-olds, £3.68. I think most big businesses can afford that: Tesco’s latest move suggests they definitely can.

2. “This Government does not have a workfare programme.”

It does, actually. Post week one of “work experience”, people have to work for their benefit. Moreover, workfare is exactly what Mandatory Work Activity amounts to: as IDS says, “it is true that we have a programme which can require claimants to undertake a short period of compulsory work if we do not believe they are engaging properly in the pursuit of employment.” He doesn’t mention it, but while we’re here, we should also mention the Community Action Programme, which involves up to six months of unpaid graft for your benefit.

Incidentally, focusing the debate only on “young people” is disingenuous: the government’s push on “work experience” affects people of all ages – which is why the Jeremy Vine show’s spot on the issue included a caller phoning in about her 60-year-old brother recently doing “work experience” at a golf club in Whitstable (here, at around 18m45s). And one other thing: arguing about supposed job snobbery misses a crucial point completely: that what really offends me and thousands of other people is a vast taxpayer subsidy to private business. Which, if you think about it, is also antithetical to the very free market economics in which IDS is said to believe.

3. “The fact is that the Government’s opponents – who constitute a group of modern-day Luddites – are throwing around these misleading terms in a deliberately malicious and provocative fashion …”

Brilliant! The use of “Luddites” and an accusation of using “misleading terms in a deliberately malicious and provocative fashion” in the same sentence. Did he read this back to himself?

4. “Out of around 1,400 individuals who have taken part in the Work Experience placement at Tesco, more than 300 have been taken on in permanent roles with the supermarket.”

That’s a success rate of 21%, and 1,100 people who worked for nothing, for nothing.

5. “Sadly, so much of this criticism, I fear, is intellectual snobbery. The implicit message behind these ill-considered attacks is that jobs in retail, such as those with supermarkets or on the High Street, are not real jobs that worthwhile people do … We all have to start somewhere: Tesco Chief Executive Sir Terry Leahy began his career scrubbing supermarket floors. I doubt I’m the only person who thinks supermarket shelf-stackers add more value to our society than many of those ‘job snobs’ who are busy pontificating about the Government’s employment policies.”

Jobs in retail are self-evidently “real jobs that worthwhile people do.” And we do all have to start somewhere: I began selling fruit and veg. The topsy-turvy logic here is mind-boggling: claiming people should be happy working for £2 an hour on the vague promise of either “experience” or a 21% chance of employment sounds not so much snobby as almost feudal: as has been pointed out, there’s a whiff of the workhouse in all this. And if anything represented snobbery, that particular institution did.

6. “… we are caught in a battle between those who think young people should work only if they are able to secure their dream job, and those like myself …”

This is followed by some impenetrable stuff about The X Factor, and the term “straw man” barely does it justice. I’ll conclude with a simple enough point: that this is not about “dream jobs”, but the most basic of civilised conditions. Oh, and a quote from that philosopher, stretcher bearer, engineer and primary school teacher and all-round grafter Ludwig Wittgenstein, which IDS should perhaps consider: “Whereof one cannot speak, thereof one must be silent.”